Professionals

Heightened risk of fraud in the context of the covid-19 pandemic: be wary of offers that are too good to be true!

Warnings

22/04/2020

Fraudulent investment offers are becoming ever more frequent and take on a variety of forms. Offers that are too good to be true are made in a wide range of fields, often linked to current events. Currently, fraudsters are not hesitating to exploit the coronavirus crisis to claim new victims. Consumers are using the internet more than ever during the lockdown, and are thus even more exposed to canvassing by fraudulent actors (emails, advertisements on the internet and social media, cold calling, etc.). If you wish to invest, the FSMA advises you to remain vigilant, because if the promises made by your interlocutor seem too good to be true, it usually is! Should you have any questions relating to the coronavirus crisis, please contact the FSMA’s new call centre.

Since the beginning of this year, the FSMA has already warned the public against:

Underlying these fraudulent offers is often the same fraudulent principle: the fraudsters gain the potential investor’s confidence with smooth talk, self-confident interlocutors and an online platform that looks very professional and allows investors to track their investment in real time. However, when those investors wish to recover their investment or withdraw their returns, the lines of communication are suddenly cut off and the fraudsters disappear with the money.

During this lockdown period, the FSMA encourages you to be even more vigilant when you encounter phone canvassing campaigns, fraudulent emails claiming to be sent to you by a trusted third party (such as a bank, public authorities, energy supplier, etc.) as well as online banner ads on social media that link to forms to be filled in (to find out more about all these fraudulent techniques, please see our warning of 1 April 2020).

The FSMA, as a supervisor with a focus on consumer protection, has opened a call centre to address matters relating to the coronavirus crisis. If you have any questions about the coronavirus crisis and the measures taken in the banking and insurance sector, feel free to contact the call centre. The contact form and phone numbers for the call centre are available on the FSMA website.

HOW TO AVOID THE TRAP?

In order to avoid such fraud, the FSMA urges you to exercise utmost prudence and advises you to remain vigilant of any indication of investment fraud. The FSMA makes several recommendations:

Be wary of (promises of) completely disproportionate returns. If a return seems too good to be true, it usually is!

Always verify the identity of the company that is contacting you (company identity, home country, etc.). If a company cannot be clearly identified, it should not be trusted.

Be wary as well of companies that claim to hold authorizations from supervisory authorities and refer you to such authorizations. This is a very frequently used technique. However, these are often cases of identity theft. You will find more information about this in the FSMA’s warning of 13 February 2020. If you have any doubt whatsoever, please do not hesitate to confirm the information you have been given with the FSMA.

Find out as well when the company website was set up. If the company’s website is relatively new, this could be an additional sign of investment fraud.

Be wary of requests to pay money into bank accounts in countries that have nothing to do with the supposed registered office of the company that approaches you, or your own place of residence.

In any event, if your contact person seems particularly insistant, this may be an additional indication of fraud.

WHAT TO DO IF YOU HAVE BEEN APPROACHED BY SUCH A COMPANY?

If you think you have bee the victim of fraud, make sure you do not pay any additional sums to your contact. Note that this is also, and especially, the case if you have been promised a refund in exchange for a final payment, as this is a technique frequently used by fraudsters in order to obtain additional funds.

The FSMA stresses the importance of filing a complaint quickly and with ample documentation (name of the company in question, bank account(s) to which you transferred money, etc.).

***

More than ever, then, prudence is necessary.

If you have any doubt whatsoever about whether financial services being offered to you are lawful, please do not hesitate to contact the FSMA directly via the consumer contact form. Equally, feel free to notify the FSMA of any suspicious company that has not yet been the subject of a warning on its part.